The Punjab government will announce its budget for the fiscal 2015-16 on Friday (today) with an estimated outlay of Rs1.2 trillion, give or take a few billions, allocating more than Rs400 billion for development programme.
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It is likely to be a deficit budget. Punjab is expected to receive about Rs895 billion from the federal divisible tax pool under the National Finance Commission (NFC) award.
It is expected to increase its provincial tax revenue estimates to Rs180-Rs190 billion from Rs164 billion in the outgoing year. The budget for the next year will be the first ever to be presented by a woman finance minister, Dr Ayesha Ghous-Pasha, who has recently been given the portfolio. Punjab government officials told Dawn on Thursday that the annual development budget would focus on mega infrastructural projects in the road, transport and energy sectors like Orange Metro Line for Lahore, Southern Loop of Ring Road, LNG-based power project, Metro Bus project for Multan, and Farm to Market roads project. It is expected to allocate Rs10 billion each for these projects during the next financial year. The government is likely to impose two percent Capital Value Tax (CVT) on the rural immoveable property worth over Rs1 million and increase professional tax rate from 10pc to 75pc.
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The revenue generation targets are expected to be met through Rs110 billion from GST on services, Rs2 billion agriculture income tax, Rs2 billion registration, Rs12 billion land revenue and Rs20 billion stamps duties. The government could spend less than half of its Rs345 billion development budget for the present financial year. The development outlay for the next financial year will be Rs54 billion less than the size provincial government had envisaged in its rolling, three-year medium-term development framework (MTDF). The MTDF had pitched development investment in the province at Rs454 billion. The government is likely to bring more services into the tax net to raise the volume of tax revenue generated through the GST on services. With Dr Ayesha in the driving seat, the government could also announce overhaul of the property and other provincial taxes as part of its tax reforms programme, the officials said. They said the next budget would be in line with the Punjab Growth Strategy 2015-18 unfurled last month.
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The strategy aims at 8pc economy growth in the next three years, creating four million jobs in the province. However, the government’s critics and many officials dub the document produced by the International Growth Centre (IGC) led by Dr Ijaz Nabi as totally different from the ground reality. “It will be impossible to almost double the economic growth rate of the province in the absence of private investment. Even the public development investment has declined in real terms during the present financial year as more than half of the funds allocated for annual development programme remained unused during the first 10 months till April,” a Lahore University of Management Sciences (LUMS) professor told this reporter.